While it may seem easier to start a business, entrepreneurs face an uphill battle from the moment they launch their company. And without a clear business plan for sales, marketing, finances, and operations, you are almost certainly doomed to encounter significant obstacles.
For this reason, developing a business plan is crucial to running a company.
That’s why we’ve created a business plan. It contains prompts for the key parts of a business plan, detailed below.
That way, you’ll be able to show them how organized and well thought out your business idea is and answer any questions they might have.
Building a successful business plan
In this part, we will examine the components of a business plan, including the executive summary and company description. But first, let’s discuss the fundamental elements that should serve as the foundation of your design.
At a minimum, your plan should include:
- Be more pragmatic than ideological: Too frequently, business plans focus excessively on how things could be, as opposed to how they are. While vision is important, your plan must be based on research and data.
- Legitimate your business idea: If an idea fails on paper, it signals to go back to the drawing board. This way, you avoid wasting valuable time or money chasing an unrealistic idea.
- Position your funding business: You will need financial support to start your business. However, investors, lenders, and banks still need convincing even with a solid business idea. An effective business plan will specify how much capital you need, where it is going, what goals you will achieve, and how you plan to pay off any debts.
- Lay the groundwork: Investors focus on risk – if something looks shaky, it could be a bargain. Ideally, your business plan will lay the foundation for operating your business — from operational needs to financial projections and goals.
- It is nearly impossible to communicate your needs without first understanding them. Of course, the needs of a business are always changing — but your plan should give you a comprehensive view of how your business will operate in the short and long term.
So back to the why and wherefore now – think about three things:
First, how does your product or service fit within the context of your industry? Second, targeting a specific market segment? Third, how do you envision the industry developing over the next five to ten years?
Your intended audience: Who are you aiming for? What difficulties do they face?
- Your Unique Selling Proposition (USP) – What distinguishes you from your competitors? Features of your product or service? Your company values? Price?
How to make a business plan
- Cover page
- Company and business description
- Line of products and services
- Market Analysis
- Marketing plan
- Sales Plan
- Legal notices
- Financial issues
An eye-catching cover should accompany your business plan. This requires a high-resolution image of your company’s logo, followed by your company’s name, address, and phone number.
Given that this business plan will likely change hands and be viewed by many investors, you should include your name, position within the company, and email address on the cover page.
You can also include a confidentiality statement at the bottom of this page to protect your business information from disclosure.
The statement might read: “This document contains confidential and proprietary information created by [your company name]. By downloading this document, you agree to keep its contents confidential and may reproduce and/or share it only with the express written permission of [your company name]. ”
Summary of the main points
Your Business Plan Highlights tutorial provides a one- to the two-page overview of your business and highlights the most critical pieces of your plan, such as your short-term and long-term goals.
The summary of the entire business plan, so remembers to keep this section to the point and only fill it with essential information.
Typically, this short section includes:
- Mission statement.
- The history and leadership model of the company.
- An overview of competitive advantages.
- Economic forecasts.
- Company goals.
- A question from potential investors.
Why it matters: The executive summary is the make-or-break section of a business plan. It affects whether or not investors turn the page — so it’s essential to effectively summarize your business and the problem it hopes to solve.
Think of the Executive Summary as a written elevator pitch (with more details). While your business plan provides minute specifics, the Executive Summary describes—in exciting but meaningful language—the highlights of your plan. If it’s too vague, complicated, or unclear, you may need to cancel it and start over.
Company & Business Description
This section provides a more thorough explanation of your company’s existence.
Most of the writing in this section should be about your company’s purpose – covering what the business will sell, identifying the target market, and charting a path to success.
In this section of your business plan, you can also elaborate on your company details:
- Mission statement
- Core values
- Team and organizational structure
Why it matters: In addition to great ideas, investors look for great structures and teams. This section provides an overview of your business ethos. It is the ideal opportunity to distinguish your business from the competition— like your team’s expertise, unique work culture, and competitive edge.
Line of Products & Services
This is where you will cover the makeup of your business’ product and/or service line. You should provide the name of each product or service, its purpose, and a description of how it works (if applicable). If you are the owner of patents, copyrights, or trademarks, it is also necessary to include this information.
Then add some color to your sales strategy by outlining your pricing model and markup amounts.
If you sell physical goods, you should also describe production and costs and how you anticipate these factors to change as you scale.
Why it matters: This section is the meat and potatoes of the business plan. It lays the groundwork for the problem you hope to solve, your solution, and how that solution fits into the market.
There is no one size fits all formula for this section. For example, one plan may delve into its ability to market more cost-effectively than the competition. In contrast, another plan focuses on its core products and their unique features and benefits.
Regardless of your angle, it’s important to convey how your offerings will differ from the competition.
The market analysis section is where you will provide details about the audience you are marketing your business to. This should include the size of your total addressable market, the demographics and psychographics of your market, and location analysis for where your business operates.
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Why it matters: Having an amazing product is awesome — but it’s not enough. Importantly, there must also be a market for it.
This section allows you to delve deeper into your market, the segments you wish to target, and the reasons for doing so. The “why” is crucial here, as targeting the right segment is critical to the success and growth of your business.
- Getting lost (or drowning) in a sea of endless data is easy. Answer the following questions to narrow the scope of your business plan.
- What is my market? In other words, who are my customers?
- Which market segments do I want to target?
- What is the size of my target market?
- Will my market likely expand?
- How can I gradually increase my market share?
A unique and varied Moroccan-American menu and our unique upscale atmosphere set us apart from our competitors in the area. Jay Street will also stand out thanks to its commitment to high-quality food, service, design, and atmosphere.”
In contrast to the market analysis section, the marketing strategy section of your plan should explain how you will reach your target audience. For example, list your advertising channels, organic marketing methods, messaging, budget, and relevant promotion tactics.
If your company has a fully formed marketing plan, you can attach it as an appendix to your business plan.
Why it matters: Marketing is what introduces your product to customers. It is an investment in your business, not merely advertising.
Throwing money at random marketing channels is a haphazard approach, so it’s essential to do the legwork to create a solid marketing plan.
Here’s some good news — at this point, you should have a solid understanding of your target market. Now, it’s time to determine how you will reach them.
Whether your sales department consists of an office full of business development representatives (BDRs) or a dozen stores carrying your products makes no difference.
The point is that all sales plans are different, so you should clearly describe yours. Common talking points include:
- Structure of the sales team and why this structure was chosen.
- Sales channels.
- Sales tools, software, and resources.
- Search strategy.
- Sales targets and budget.
As with your marketing plan, it may make sense to attach your comprehensive sales plan to the appendix of your business plan.
Why it matters: Among other things, investors care about the scalability of your business — that’s why growth strategies are a critical part of your business plan.
Your sales plan should outline your plan to attract customers, retain them (if applicable), and ultimately grow your business. Be sure to describe what you plan to do, given your existing resources and the results you expect from your work.
We are not an inexpensive dining option in the vicinity. Instead, the food will be priced at a premium to match its opulent atmosphere.
Your investors may be interested in your business’s legal structure, as it may directly affect the risk of their investments.
Because this clarification is often needed, explain whether you are and/or plan to be a sole proprietor, partnership, corporation, LLC, or other.
You should also describe the steps you have taken (or should take) to operate legally. This includes licenses, permits, registrations, and insurance.
After sending you a large sum of money, the last thing your investor wants to hear is that you operate without the proper local, state, or federal authorization.
Why it matters: The last thing your investor wants to hear after sending you a big chunk of change is that you’re operating without the proper approval from the local, state, or federal government.
Ultimately, investors want to know two things:
- When will they get their money back?
- When will they start seeing returns on their initial investment?
That said, be clear, calculated, and persuasive in this section. It should cover:
- Startup cost.
- Sales forecasts for the coming months/quarters.
- Breakdown of dead time and dollars.
- Projected Profit and Loss (P&L) Statement.
Figures and numbers are key here, so be as specific as possible with each line item and view. Additionally, explain the “why” behind each of these sections.
However, remember that information overload is a risk, especially regarding data. So if you have pages upon pages of charts and spreadsheets for this section, distill them down to one or two pages and include the remaining sheets in the appendix. This section should focus only on key data points.
Why it matters: Knowing your numbers is one of the most important aspects of becoming “investor-ready.” Most importantly, I need to understand how these numbers boost your business.
While it’s easy to write a number on paper, it’s more important to understand (and communicate) why you need capital, where it’s going, and that your valuation makes sense.
A detailed and well-developed business plan can range from 20 to 50 pages, with some even reaching 80.
In many cases, the appendix is the largest section. Why; Because it includes the supporting materials mentioned in previous sections. To avoid interrupting the business plan flow with graphics, charts, and spreadsheets, business owners usually add them to the last section, the appendix.
What has already been discussed – marketing plan, sales plan, departmental budgets, and financial documents – you may also want to attach the following in the appendix:
- Marketing materials
- Market research data
- Licensing documentation
- Brand assets
- Floor plans for your location
- Mockups of your product
- Renderings of your office space or site design
Adding these sections to the appendix enriches the reader’s understanding of your business. It demonstrates that you’ve put the work into your business plan without distracting from the main points throughout the plan.
Why it matters: An appendix helps the reader do their due diligence. It contains everything needed to support your business plan.
Keep in mind, however, that an annex is usually only necessary if you are seeking funding or want to attract business partners.
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